As people carry out their daily activities, they present observers with a complex series of short-lived events that flow rapidly into one another. Nonetheless, observers readily understand and describe other people's action in terms of goals and intentions. Discerning others'intentions and goals from this complexity is crucial for understanding others'mental states and for learning from the world more broadly. Research indicates adults possess a powerful cognitive system for perceiving, organizing, and remembering the actions of others, and some components of this cognitive system are online early in infancy. The current research aims to probe further the nature of infants'action processing skills, and to identify mechanisms of development in this domain. A first series of experiments will address the development of action discrimination in infancy, using looking-time methodologies that capitalize on infants'preference for novel information. These experiments will investigate whether infants'discriminatory abilities generally become more selective with age, and also whether adults and infants are flexible in their selective attention to different properties of action in discriminating other people's behavior. The neural correlates of selective attention in action discrimination in adults will also be investigated. A second series of studies will address the mechanisms behind infants'change in action discrimination abilities. Specifically, these studies will explore the role of infants'experience performing actions themselves in developmental changes in their discriminatory and inferential abilities. These studies will further our understanding of the development of the cognitive system for processing other people's behavior, which underlies mental state reasoning. Understanding the normal course of development of this system will eventually aid in our understanding of developmental disabilities that impair mental state reasoning, such as Autism. This knowledge may eventually lead to early identification tests and intervention programs for individuals with such disabilities.